News: Company formation and registration services in Kyrgyzstan

Company formation and registration services in Kyrgyzstan

For business, cooperation with the countries of Central Asia is not a different sort of things. However, in most cases, trade is focused on Kazakhstan and Uzbekistan. Kyrgyzstan somehow remains on the sidelines, totally undeservedly. Kyrgyzstan is a market for 6 million people, with a considerable number of niches. Russian is the state language here, along with Kyrgyz. The state is a member of the WTO and the Eurasian Union. The Double Taxation Avoidance Agreement (DTA) is in force with 27 countries.

Features of taxation in Kyrgyzstan

A company in Kyrgyzstan can operate under one of two taxation regimes:

• Common (CST);
• Unified imputed income tax (UTII).

The common taxation system provides for the payment of income tax in the amount of 10%. There is also a sales tax, which varies from 0% to 3%, depending on several conditions: type of activity, method of payment, etc. For some product groups, it is necessary to pay VAT. Another mandatory payment in Kyrgyzstan is a garbage collection fee, which is equivalent to $ 1.44 per month.

As for dividends, they are also subject to a standard tax of 10%. However, this rate may change if the holders of securities are individuals and legal entities from countries with which DTA is valid.

The taxation of companies on the single tax differs from the CST in the following features:

• No income tax;
• No VAT;
• No sales tax.

A single tax can vary from 6% to 2% of the company's profits. The rate is calculated based on the type of activity of the organization, and also depends on how the company pays taxes - in cash or through a current account. You can work on this system if the company's revenue does not exceed 8 million soms, which is equivalent to $ 118 thousand.

Forms of incorporation

Registration of companies in Kyrgyzstan is possible according to one of four options. The legal forms in the country are as follows.

1. LLC - a limited liability company. No more than 30 shareholders can create such an organization.
2. CJSC - the maximum allowable number of shareholders is 50 people.
3. OJSC - an unlimited number of participants can create such an organization;
4. A branch of a non-resident – is not considered an independent legal entity, but acts as a dependent organization.

If the company has exceeded the maximum number of shareholders for its legal form, but at the same time has not managed to reorganize before the end of the calendar year, regulatory authorities can appeal to the court to liquidate the enterprise.

High Tech Park

Another important nuance you need to know about Kyrgyzstan is the High Technology Park (HTP). This is a special economic zone, the participants of which are not required to pay income taxes on sales and VAT. Personal income tax for employees of organizations that are participants in HTP is reduced from 10% to 5%. However, Park participants will have to pay a special fee of 1% of revenue for the previous quarter.

IT companies can be members of HTP: producing software, improving existing software, working for the export of information technology, etc. Initial registration in the Park provides for membership for six months, after which it is necessary to submit a report that the company’s activities comply with the requirements of the economic zone. If so, the membership becomes perpetual.

Kyrgyzstan is a member of the EAEU

The country is a full member of the Eurasian Union, which gives undoubted advantages. In particular, Russians and citizens of other countries included in the association can enter Kyrgyzstan without visas and passports. Companies from these states have the right to open affiliates by submitting to the regulatory authorities only a profit report. Retained earnings tax is not paid if the profit is more than 10 million rubles.

Kyrgyzstan should undoubtedly be of interest to companies that intend to expand their business not only in Central but also in Southeast Asia. This state is not included in the list of offshore zones, and its reputation does not raise any doubts among the tax authorities of various countries.

Law&Trust is ready to provide company registration services in Kyrgyzstan. We are ready to represent your interests in state bodies, prepare documents, make the necessary notarial translations. We will also help with opening a current account and registering in the Pension Fund and other organizations.